Legislature bridges '03 budget gap

Subsistence, veterans bills, utility commission keep session going

Democrats and Republicans alike say they've laid the legislative groundwork for progress next year on closing the state's fiscal gap and ensuring a balanced approach to major school construction projects.

The Legislature resolved its money issues late Sunday night, approving school construction bonds and debt-reimbursement, balancing the general fund with a draw of nearly $1 billion from the Constitutional Budget Reserve and passing a $1.2 billion capital budget.

"I guess the clich for what's going on right now is, the third time's the charm," said House Speaker Brian Porter, an Anchorage Republican. He was referring to failed efforts at compromise on the final day of the regular session Tuesday and at the end of a two-day extension Thursday.

"What we have finally accomplished with the bills that we passed today I really think is monumental," Porter said.

The special session continued into Day 4, however, because the Legislature has not addressed issues raised by Democratic Gov. Tony Knowles.

Knowles issued a proclamation Sunday evening for another special session, to begin upon adjournment of the one called by the Legislature last week.

The governor wants action on two bills for veterans and another extending the Regulatory Commission of Alaska. Legislators said they would make an attempt to resolve those issues today.

But one issue doesn't appear headed for quick resolution subsistence. Knowles had called a special session on that topic alone, although it became subsumed within the Legislature's multi-topic special session.

Republicans said they are contemplating a break in the special session of a couple of weeks, a cooling-off period that would allow more time for negotiations on a constitutional amendment concerning hunting and fishing rights.

"I think there's been more movement in that area than we've seen in a number of years," Senate President Rick Halford, a Chugiak Republican.

This morning, Knowles said he's encouraged Halford, Sen. Jerry Ward and other legislators who have opposed a constitutional amendment in the past are negotiating on the issue.

"They are in the process of dealing with the issue in a good-faith sense," the governor said.

Ward has offered a counterproposal to the governor's amendment for a rural subsistence priority. The Nikiski Republican instead would base a preference on the customary and traditional use of local resources.

The Legislature failed to address the state's recurring gap between revenues and expenditures, which is projected to create a $1 billion deficit in late 2004, when reserves run out.

But lawmakers said this year's lengthy debate was not in vain, even though it produced only a $20 million increase in the alcohol excise tax.

"We got a lot of work done on some very difficult concepts," said Senate Finance Co-Chairman Dave Donley, an Anchorage Republican. Donley won Senate passage of a constitutional amendment for a 2 percent spending cap but couldn't get the House to act.

Meanwhile, the House approved $900 million in three revenue bills that were ignored or defeated by the Senate.

"I think we highlighted discussion of the revenue package to the point that it's going to be impossible next year to avoid," Porter said. "I think the structural changes that the Senate would like to have seen put in place are also unavoidably going to be discussed next year."

"The House, in a bipartisan way, showed that we were willing to make progress on a long-range fiscal plan, and there's bipartisan credit deserved for that," said House Minority Leader Ethan Berkowitz, an Anchorage Democrat. "I'm sorry the Senate didn't pick up that initiative."

Senate Minority Leader Johnny Ellis said it would have been pointless for Democrats to use their leverage in the annual budget-balancing vote to try to force a fiscal plan on Senate Republicans.

"They staked out their turf early," Ellis said. "We just didn't believe we could force them into doing something of that magnitude even using the three-quarters vote."

The Legislature approved about $150 million in general-obligation bonds to build or renovate nine schools in the Bush, and in turn provided about $250 million in state funding to reimburse up to 70 percent of the cost of school projects in organized municipalities.

If voters don't approve the bonds in November, the debt-reimbursement bill is lost, as well. That "linkage" is intended to ensure a balanced approach in urban and rural areas. But it is not the long-term tie-in that Democrats sought during the regular session and through last week's two-day extension.

"It's not the historic achievement it might have been," Ellis said. "But we struck a good deal for a shorter period of time."

"Good ideas are just that they come back," said Rep. Beth Kerttula, a Juneau Democrat. "It's a simple idea, but it's a beautiful idea. It brings the two parts of Alaska back together in a solid way. It's something that all of us here now know about.

"So this isn't an idea that will die. This is such a good idea that I think next year we can come back and work on the parts that were bothering people and go forward."